Ltd Company interest on Directors loan?

by Readers Question

14:14 PM, 16th April 2018
About 3 years ago

Ltd Company interest on Directors loan?

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Ltd Company interest on Directors loan?

Just wondering if anyone has any ideas on this as I am not finding much on the web and there seems to be different ideas about CT61 forms.

I am about to ( July 18 ) clear the mortgage across my 6 flats which I have had in a ltd company since 2005. I have thrown every penny of savings at this each year and come July will be sitting on £600k property with no debt and £3000 per month income. The directors loan will be £375k

Do I start charging interest to my ltd company and take the money as interest…at say 5%. If so does the company pay 20% to HMRC and then me again on my tax return? If so that does not sound economical.

Or do I let it run as in the past and not take any interest but start taking dividends. After general running costs I should be left with around £25k to pay tax on.

I am planning to stop working as I also have an income of around £12k from other flats which are not in the ltd company as back in 2005 they would have had too much Corporation Tax to pay.

Any thoughts are welcome – plus I am in Scotland as that now makes a tax difference unfortunately.

Peter

Comments

Peter Gulline

16:57 PM, 19th April 2018
About 3 years ago

Reply to the comment left by Paul Mullally at 19/04/2018 - 16:42
So i wont be hit for 20% tax on the interest on my self assessment as its already been deducted on the CT61 .....as long as i stay below £46 k. which i will

PaulM

17:01 PM, 19th April 2018
About 3 years ago

Reply to the comment left by Peter Gulline at 19/04/2018 - 16:57
Correct

Peter Gulline

17:02 PM, 19th April 2018
About 3 years ago

Reply to the comment left by Paul Mullally at 19/04/2018 - 17:01
Great Paul - All that hard saving looks like its going to pay off ....not a load of cash but enough to get by.

PaulM

17:07 PM, 19th April 2018
About 3 years ago

Reply to the comment left by Peter Gulline at 19/04/2018 - 17:02
oh yes, happy times 🙂

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